This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
A surety who signs as a joint-maker may show his relation to the instrument in an action thereon between himself and the payee.1 Showing such relationship does not contradict the instrument on which action is brought. However, as such relationship is usually important as between the surety and the payee when the surety has been released by the payee's giving an extension of time to the principal without the consent of the surety,2 or when the jurisdiction of the court is affected by the question of suretyship, the effect of such evidence is to change the legal rights of the parties, though not the legal effect of the contract. Thus where A the real surety signed as maker, B the real borrower appeared as payee, and B endorsed to C the real lender, these facts may be shown where by reason of citizenship in different states, the United States courts would not have jurisdiction otherwise.3 So the makers of a note may show that they are all sureties for a principal who never signed at all, and thus show that they are discharged because the payee has released other security.4 So a wife who gives a mortgage on her own realty to secure her husband's debt can show that she was surety for him.5 In an action between sureties for contribution even greater latitude is allowed, since the contract between the sureties is scarcely ever in writing, and the action is therefore not between the parties to the written contract. Thus where a note was signed by A, B, C and D, and the word "surety" was added to D's signature, C may show that he, too, was a surety, and, having paid the note, is entitled to contribution against C.6
7 Montgomery v. Ins. Co., 97 Fed. 913; 38 C. C. A. 553.
8Nally v. Long, 71 Md. 585; 17 Am. St. Rep. 547; 18 Atl. 811.
9 Baker v. Flick, 200 Pa. St. 13; 49 Atl. 349.
10 Stevens v. Pierce, 151 Mass. 207; 23 N. E. 1006; McLean v. Nicol, 43 Minn. 169; 45 N. W. 15; York v. Steward, 21 Mont. 515; 43 L. R. A. 125; 55 Pac. 29; Naumberg v. Young, 44 N. J. L. 331; 43 Am. Rep. 380.
11 Naumberg v. Young, 44 N. J. L. 331; 43 Am. Rep. 380; citing Dutton v. Gerrish, 9 Cush. (Mass.) 89.
12 Tufts v. Verkuyl, 124 Mich. 242; 82 N. W. 891.
1 Compton v. Smith, 120 Ala. 233; 25 So. 300; Buck v. Bank, 104 Ga. 660; 30 S. E. 872; Daneri v. Gazzo-la, 139 Cal. 416; 73 Pac. 179; Crad-dock v. Lee (Ky.), 61 S. W. 22; Youtsey v. Kutz (Ky.), 60 S. W. 857; Weeks v. Parsons, 176 Mass. 570; 58 N. E. 157; Hitchcock v. Frackleton, 116 Mich. 487; 74 N. W. 720; Stovall v. Adair, 9 Okla. 620; 60 Pac. 282; Faulkner v. Thomas, 48 W. Va., 148; 35 S. E. 915; Breitengross v. Farr, 100 Wis. 215; 75 N. W. 893.